Rogers Communications is dynamically inserting advertisements into its Rogers On Demand program streams during mid-roll breaks. These mid-roll ads and dynamic pre-roll insertion of content promotions began last month, according to systems integrator and on-demand technology provider SeaChange International.

The Canadian MSO will implement dynamic insertion across its cable markets later this year, but it is the first to use mid-roll breaks in North American television operators, according to SeaChange, which has added its advertising decision manager (ADS) to Rogers’ multi-vendor on-demand infrastructure. The company said its back office and disk and flash memory-based video servers already deliver about 500 million streams annually to Rogers subscribers.

The VOD market continues to beckon marketers. “Over 50 million cable subscribers have access to on-demand services, representing vast untapped potential for targeted promotions and advertising in North America,” said Aseem Bakshi, General Manager, Advertising, SeaChange.

Bakshi said advertising and promotions not only helps content owners “capitalize on their commitment to non-linear delivery,” but also increases customer satisfaction and drives more content into on-demand platforms.

North American-based research from the Advanced Advertising Media Project (AAMP) has backed up that “virtuous cycle” thesis on customer satisfaction to some extent, with evidence that consumer enjoyment of VOD remained steady, despite varying low, medium and high loads of advertising.

Promoting VOD views is clearly in the interest of content owners. “Cable network are pushing it harder,” said Mitch Oscar, EVP Televisual Applications at MPG. “It doesn’t cost them anything more, and counts as part of Nielsen ratings for first three days.”

Dynamic addressable advertising (DAI), however, has been enabled in less than of the 50 million VOD-enabled homes. The category has picked up steam primarily in Comcast, which has rolled out the capability to 18 million homes. But the chicken-and-egg question remains how large must the platform be to attract ad buyers.

The dynamic element of DAI solves one obstacle that has beset VOD advertising: the original 30-day prior requirement for VOD ads. Advanced DAI-enabled systems also address the need for reporting. In the case of Rogers, the SeaChange ad decision manager brokers ad placement requests from the back office to the ADS, instructs the video servers and then reports playout data to the ADS for traffic in billing.

Oscar said the challenges that remain include the need for reporting that better approximates Nielsen ratings and integrates with business workflow systems, namely Donovan Data Systems, now MediaOcean. “You can tell by your gut, ‘OK, if I’m going to be on Nikoledeon, that’s kids.’ But there are no specific numbers,” Oscar said. “Gut not good enough.”